YC S12 company refuses to pay for my design. "Send your claim to our legal team"

I'm going to go out on a limb and register a slight discomfort with the increasing use of HN as a "court of public opinion" in very fact-bound disputes like this one. I can sort of see resorting to it out of desperation, but I'm afraid the Internet Lynch Mob has a very high ratio of outrage to effort spent actually investigating. This post has 84 upvotes in 21 minutes, which suggests a <i>very</i> quick investigation! So, the potential for erroneous snap judgments in such a Court seems high. The designer here may very well be in the right, but I don't feel qualified to judge or do anything about it based on the available information, any more than I do with the hundreds of other designer-client disputes that happen on a regular basis.

I don't understand what happened here. The CEO told him to submit his invoice to legal@. Did he do that? What did their legal say? Did the company formally decline to pay the invoice? Or did he just assume he wasn't going to get paid and jump the gun?<p>But anyways: LESSON LEARNED for startup CEOs. Here it is, it's very simple:<p>If you want to question or slowroll an invoice, direct it to finance@, not legal@.<p>You have exactly the same set of options with finance@, and your legal can still review the invoice, ping the vendor, or what-have-you, but you haven't escalated the situation.

Hey everyone: can we hold on for just one minute before forming an Internet Lynch Mob and maybe try to get the other side's perspective? Because we only have one side of the story right now. How do you know the OP isn't lying? Or that OP isn't a competitor trying to destroy this company's credibility? Or, maybe this was just a simple misunderstanding/miscommunication? I'm not accusing the OP of lying, but there's zero evidence here right now. Think rationally and consider every possibility.<p>I don't know the founders and I have no connection to the company in question (other than participating in a previous YC batch).

Without saying anything about this particular situation, can I just point out for the four hundredth time that $780 invoices generate far, far, far more stupidity than $7,800 or $78,000 invoices do? This is the fault of both people who send $780 invoices and people who generate work likely to cause $780 invoices. Many of you will be able to pick whether you are either of these types of people. I suggest being neither.

It's just 3 days of work. Did she seriously point to her lawyers to fight 3 days worth of wages? Not only is the CEO irresponsible, she sounds pretentious. Does Eligible have a legal team?

I don't understand this, people. They're YC funded, in the worst case they have how much now, 10k? Risk your reputation for a few hundred dollars, having a few thousand in the pocket, why?

It's the response that bothers me the most:<p>&#62;I figured :)<p>It's hard for me to comprehend how little they value their reputation with such a response. $&#60;1000 apparently. Shameful.

You get what you pay for I guess. Their mobile app looks terrible, tries to copy the Path sharing functionality in a completely strange context. When something like this could be created with a far cleaner interface.<p>In a strange way I understand the position the CEO may be in. They may have thought because they weren't going to use it they shouldn't have to pay. In the past I've paid a designer for work only to change my mind on a product but that isn't the designer's fault. You still have to pay whomever completes work for you, even if you don't use it.<p>Just sounds like across the board naivety, rather than malice especially with the legal department comment. It's always best to sort problems out immediately and directly or they get in the way.

My advice? Get up, dust yourself off, and move on.<p>These scenarios might result in a deluge of support from others in your field, but for a lot of managers, this puts you on a special kind of blacklist. We can't know all the details of the circumstance, but we do know for sure that you were willing to "name &#38; shame" the client here on HN. For some, that's enough.<p>Just to be clear, it definitely sounds like you got a raw deal here, but I've only heard your side of the story. Experience tells me that people who find themselves in this position are there because they cut corners (work order and statement of work), or trusted someone too early. Both of these are poor judgement calls. Take ownership of that, learn from it, and go find new clients. If you're not in a financial position to take it on the chin, file your small claims paperwork and have your day in court. I just doubt that the name &#38; shame approach is the best thing for the future of your career as a freelancer.

This happened to me as well with a YC company. I then found out that YC companies are known for this kind of thing since they're so early-stage. Always get a contract.

How much does it really matter in these situations whether or not you have a "signed contract"? My understanding is that any agreement to do work for compensation <i>is</i> a contract, and these days even a "signed" contract is likely to just be a PDF which is as easily faked as an emailed "$65/hr? Sounds good, go ahead and get started."<p>Is it just one of those things where someone's less likely to try to rip you off if they put their signature on something? Or is it more to make sure you get the words in front of a couple of lawyers who are much less likely to lie than the involved parties?

This is fucked up. Not the only YC company I know that has done this to a designer, I really hope this gets voted up.

I'm delighted to see that disputes are being solved this way instead of tying up the assets of our judicial system. Remember the days when we actually tried to resolve our problems and court was a last resort? Now the sentiment seems to be that you should file in small claims court instead of writing a post on reddit.<p>I'm glad to see 'court of public opinion'(AKA reputation) make a comeback. The concept of reputation is, in my humblest of opinions, more important than our legal system when it comes to keeping people from behaving badly. Being publicly shamed is a deterrent for unethical behavior in a way that our courts can not be because of the ridiculously high cost of litigation.

The op has, hopefully, learned a valuable lesson: don't work without a signed contract.<p>That said, the comp should have just paid or, at very least, tried to negotiate the amount thought I don't think that's worth the effort either. This is such a paltry amount as to not be worth the effort to fight.

Small claims court and a public shaming. Done and done.

I've also been in the equally unenviable position of having to pay for someone who completed work according to a scope that was too vaguely defined. The guy I contracted to do the work did the work according to the broad outline I originally set out.<p>Being young &#38; stupid at the time, I blamed him for thinking he took shortcuts and refused to pay him all of what he was owed at first. But it was my fault for not being more specific in the original job. I eventually apologized and paid him the rest of the money. Lesson learned.<p>I believe design work is especially prone to this. But none of this is an excuse. If you have a signed contract, you honor it. Period.

My advice - Watch Mike Monterios talk: Fuck You Pay Me. <a href="http://vimeo.com/22053820" rel="nofollow">http://vimeo.com/22053820</a>

Seriously? Who refers someone to legal for $780? Especially considering they are YC funded. That seems absurd. (Obviously only one side of the story here, but it seems clear they wanted the work done asap)

I feel really sorry for the CEO. She's inexperienced, she didn't know to just pay the money, and in her first disagreement with a contractor, she got an internet lynch mob on her back. She did the wrong thing, of course, but the cost was much higher than this merits. Even if she does the right thing now, there are many who will consider this a black mark on the company indefinitely.

To the CEO if the report is substantially accurate:<p>The cost of attorneys and more importantly the distraction isn't worth the worst case invoice for three days work. It's not going to cost you your shirt, just one sleeve. Be glad it's a cheap lesson.

There's a lesson here on the other side, as well: when you're hiring any kind of contractor (designer, lawyer, etc.) you need to specify not just an hourly rate, but also an estimated number of hours. One person's idea of "getting started" on a project may be an hour or two of work, another's may be several dozen hours. Getting an invoice for many times what you thought you were agreeing to is an unpleasant shock, regardless of how it's resolved.

Pedant point: a lot of people are writing about "verbal contracts" when they mean "oral contracts". A "verbal contract" is a contract in words--whether spoken or written, as opposed to a contract that is inferred from actions or implied by law.<p>Both contracts in this story (the one possibly agreed to on the phone, and the one offered in writing by email) were verbal contracts--one oral and one written.

This is off-topic and I couldn't really figure out what it is that eligibleapp does, but why would they not come out with a web app first? Restricting whatever it is they're doing to the iPhone seems shortsighted.

Oh this isn't me by the way I just saw it on Reddit.

What company was it?

If hiring a lawyer doesn't work out, surely YCombinator itself could do something about it, since they are in the current batch?

I wonder how long this post will be up before the designer gets paid.

At $65 / hour, how big of a bill could the designer have possibly generated over three days?<p>Just pay him and get it over with - anything under $1,000 is chump change.

I believe this is what you're looking for:<p>(a) <a href="http://www.eligibleapp.com/" rel="nofollow">http://www.eligibleapp.com/</a><p>(b) <a href="https://eligibleapp.desk.com/customer/portal/emails/new" rel="nofollow">https://eligibleapp.desk.com/customer/portal/emails/new</a>

<i>On a side note: If any startups are looking for part-time designers, I am now available.</i><p>This coming at the end of the rant, may not push another potential client over the threshold of decision after all that came before it.

Well. Your design looks nicer at least, and you're probably getting more than $XXX exposure now (Their current one.. doesn't - but it could be worked on as a first revision - hopefully their current designer iterates hard!)

I don't get it - did he actually email legal@ and get a negative response, or are we just spawning internet lynch mobs the second we run into the slightest amount of resistance now?

In the screenshot, what the heck do those pie and bar graphs represent?<p>Also, seems strange that he's coy about the name in the text, but seems to show it on the screenshot.

This is what you don't do if things don't work out. Go to small claims court, do not post it on the internet and open yourself to getting sued for libel.

Pay the guy his money, but man, that design is pretty bad.

Seriously? Please learn how to properly freelance before publicly flaming a bootstrapped startup. Always get your task/rate in writing before continuing..

pretty ironic that this is posted on reddit

One key point is that YC is a great brand in the tech community. If you are a YC graduate, your have the credibility of it behind you as if someone was a Harvard grad. Doing stuff like this erodes the brand for an trivial amount of money.<p>Work was done here, and if they weren't a YC company and some other guy, it is less likely that a designer would work for them without some kind of written agreement.

I hope the screenshot is fake data and not violating anyone's HIPPA rights, otherwise this designer is going to be in a lot of very hot water over this.

Not handled professionally on the designers part. He could have turned this into a win by being their go-to-guy for future contract work or getting referrals to other YC residents instead.<p>I don't think it was worth resorting to public shaming for a few grand. I guess Eligible got some free press out of this now. Well done!

I wouldn't pay you for that design. It's mediocre and needs major refinement. I would tell you to redo it. Get over it and learn to hustle better, Otherwise you won't make it very long as a designer. Verbal agreements don't mean anything any more. Clients just don't care and designers are a dime a dozen these days. If we fail then our competitors pick up our mess. Again I will say, get over it and find some other work. If you are as good as you think you are then you should have no problem finding work, right?